Morgan Lewis Jr.

Monday, 22 September 2003 13:14

This old building

George "Bud" Arquilla, president of the Burnside Construction Co., may be based in Chicago, but he's a big fan of Northeast Ohio.

"In Chicago, you have to go through 123 departments to get a permit," he says. "(In Cleveland) you still have to get a permit and it still takes a while, but at least they support you ... and it's not lost in bureaucracy."

Arquilla's construction firm is leading the $68 million renovation of the W. Bingham Building in downtown Cleveland in the Warehouse District. The building will offer 340 loft apartments, an 8,000-square-foot grocery store and a staffed fitness center.

The redevelopment of the 88-year-old building carries a big price tag -- the largest renovation in the state this year -- but projects like this in historic urban areas don't necessarily need to be much more expensive than starting from scratch in the suburbs.

"Basically, what you're buying is the shell, and then there's good news and bad news about that," Arquilla says. "The bad news is, it's old, and the good news is, they usually built them quite well in those days."

For those who don't remember, W. Bingham Co. used to be the largest hardware distributor in the country, so its headquarters had to be sturdy. The building has 13-inch concrete floors, surrounded by four inches of compacted sand, with maple floors on top.

"It's very attractive in terms of renovation due to the wood flooring," Arquilla say. "In other words, that would cost you a fortune to do that new today. In an older building, you can pick that up at a lower price."

Since the Bingham Building is on the National Register of Historic Places, Burnside qualified for several forms of government financing and tax breaks earmarked for urban redevelopment.

The Bingham renovation was primarily funded through the U.S. Housing and Urban Development's 220 Urban Renewal Program. Locally, National City Bank invested $16 million in historic tax credits and conservation easements for the project, and the Cleveland Development Partnership provided a $1.25 million bridge loan during acquisition and construction.

However, all those financing sources do carry a burden for historic renovations.

"Basically, what you have to do is restore the building to its original luster to the best of your ability," Arquilla says. "We had to dig out all of the original drawings from this building from 1915. That means cleaning, tuck pointing, there's steel reinforcement and all that kind of stuff that has to be an exact replica."

Despite these requirements, Arquilla estimates that a restoration similar to that of the Bingham Building would cost an owner $60 to $70 a square foot, while new construction in the suburbs could cost as much as $100 a square foot.

"There are the benefits," Arquilla says. "If a CEO is smart to figure they want to be in a renovated area, what are they saying? They're saying things like, we want to be where our employees are, and they're willing to drive into the inner city to do it."

"In the case of where the Bingham is, it's actually kind of a hip place to be. It's a lofted look. What does that mean? It implies a wood floor, typically exposed electrical and duct work. In the suburbs, we hide all that behind dry wall." How to reach: Burnside Construction Co., www.burnsidehomes.com


Lights out

Lighting accounts for 30 percent to 50 percent of a building's energy use, or about 17 percent of total annual U.S. electricity consumption.

Simply turning off unneeded lights can reduce the amount of energy used for lighting up to 45 percent, according to Bethesda, Md.-based Earth Share. At the same time, using less energy reduces air pollution, global warming and other environmental impacts associated with electricity generation.

In an effort to reduce lighting bills and cut energy costs, more offices are installing occupancy sensors, devices that automatically turn lights on and off in response to the presence of a person in a room.

Most occupancy sensors work in response to motion or sound: infrared sensors detect the infrared radiation -- also known as body heat -- that people generate, and turn lights on or off depending on whether they detect infrared radiation.

Occupancy sensors are generally installed on ceilings or walls and come with a controllable switch so they can easily be deactivated if necessary.

However, the "old" ways of reducing electricity use still work.

* Turn off lights when leaving a room. Get into the habit of always turning off the lights, even if you are only going to be away for a short time.

* Use low wattage bulbs to save energy.

* Install compact fluorescents. Source: Earth Share, www.earthshare.org

Monday, 22 September 2003 11:38

Fast lane

More than 40,000 people are injured each year in vehicle collisions along temporary work zones across the country, according to the U.S. Department of Transportation.

In 2001, 1,079 people lost their lives in these areas.

But since Akron-based Mid-American Security Inc. launched its traffic control division, Area Wide Protective, in 1993, there has not been a single accident or injury in one of its work zones after more than 4 million hours of traffic control.

"There's more than luck to it," says Mid-American Security President and CEO William Fink. "We've elevated a bit of an abused occupation to a level where it gains the respect it deserves."

Before Fink purchased the company in 1992, he ran a private commercial insurance agency which covered Mid-American Security.

"It was a nice, small local business," Fink says. "Nothing spectacular in terms of growth, just a nice, little, well-run business doing contract security guards, primarily for businesses and institutions in the Akron area."

Fink sold his agency in 1990, and was a consultant for two years before the previous owner of Mid-American offered to sell the business. Fink had followed the deregulation and downsizing of utility companies and recognized their need for outside traffic control services.

"It doesn't make a whole lot of sense to have a journeyman lineman at his level of pay and experience flagging (traffic) when his education and resources should be brought to bear to turn the electricity on," Fink says. "There is too much going on for local police to handle all of that. We met a price point where that was a very competitive thing to do."

Today, Area Wide Protective employs 350 traffic control officers or flaggers in eight states working for the largest utility companies in the country, including FirstEnergy, SBC, Dominion, Columbia Gas and American Electric Power.

"Our people, day-in and day-out, direct more traffic than most police officers do," Fink says. "We have a lot more experience with this than most people would have."

On the security side, Area Wide guards Cleveland Hopkins Airport, Akron Children's Hospital, Summit County Children Services Board and the 27,000-acre Ravenna Arsenal. How to reach: Mid-American Security Inc., (330) 644-0655

Tuesday, 26 August 2003 13:00

Proof of life

Consider the credit card swiper.

When we purchase something, we have no qualms about the cashier swiping our card through a machine, which checks if it is valid and we have credit. Where is a system like this for driver's licenses, passports and other photo IDs?

If that doesn't seem necessary, consider the fact that 14 of the 19 hijackers on Sept. 11 could've been stopped if the validity of their identification had been checked. They used fake identities, stole passports, illegally obtained driver's licenses and used false Social Security numbers.

Security at the airports didn't know any of this, though, because the only thing used to determine if their IDs were valid was the judgment of airport and airline employees.

According to David Akers, his company, EagleCheck Ltd., could have stopped these terrorists, and possibly the Sept. 11 tragedy.

"The government is focused on what is getting on planes," says Akers, president. "We're focusing on who."

But it was two years before Sept. 11 -- in 1999 -- when Akers and co-founder Jason Korosec launched Shaker Heights-based EagleCheck. CEO Korosec spent more than a decade in the credit card industry. One day, he realized that the same type of technology used in his industry was applicable to checking photo IDs; the infrastructure just wasn't in place.

The EagleCheck network would link more than 70 local, state and federal identification and criminal databases. The system is unique in that it would not require the creation of a centralized database, which would be much more expensive and time-consuming for the organizations involved.

The ID, once scanned, would be run through the government databases individually to determine if the person on the ID does indeed exist, if the ID is valid and if the person with the ID should be detained. The process, depending on the type of ID, would take about five seconds.

Akers estimates that implementing the system in airports nationwide would cost $200 million -- a small price considering that next year's budget for the Homeland Security Department alone will be $28.5 billion.

EagleCheck is new, with only a handful of employees and less than $1 million in revenue, so a project of this magnitude is going to require some help.

"If you're going to do something in the government space, they don't hire EagleCheck to do it," Akers says. "They hire an IBM or a Northrop Grumman. We're going through due diligence with strategic partners who are big, established players in technology and the government arena." How to reach: EagleCheck (216) 752-5931

Tuesday, 26 August 2003 11:58

Choose wisely

Every day, John Ludwig, CEO of Park Companies, gets a phone call from a charity or nonprofit organization asking for a donation. Some he gives to. Others he doesn't.

Few companies have the budget to contribute to every needy group trying to raise funds, so it's important to set firm guidelines for your charity dollars.

"We try to stay close to our community," says Ludwig, whose company owns and operates Park Honda, Park Acura and Park Mazda in Green. "We don't do things that are fund-raisers by outside corporations because all the money does not go directly toward the cause. All the money has to go toward the cause."

In April, Park Companies donated $10,000, and became the first sponsor in a new corporate campaign for the Humane Society of Greater Akron. The goal of the campaign is to raise at least $100,000 of the Human Society's $800,000 annual budget.

In return, Park Companies was recognized for its sponsorship at three major humane society events in the Akron-Canton area; the final event is to take place this month.

"I'll share the spotlight with anyone," Ludwig says. "They need it. They want to raise $100,000 and they want to build a new facility. I'd like to see everyone get on board. They don't have to give what we did, but just give something."

Ludwig continues, "We like to put our promotional dollars to support the community and we budget so much a year for that. It's not whoever gets there first. We have the things we do every year and things we just won't do."

Regardless of how you choose to spend your philanthropic dollars, here are some charitable giving basics from the Better Business Bureau's Wise Giving Alliance.

* Do not give cash; always make contributions by check, and make your check payable to the charity, not to the individual collecting the donation.

* Keep records of your donations (receipts, canceled checks and bank statements) so you can document your charitable giving at tax time. Although the value of your time as a volunteer is not deductible, out-of-pocket expenses (including transportation costs) directly related to your volunteer service to a charity are deductible.

* Don't be fooled by names that look impressive or that closely resemble the name of a well-known organization.

* Check out the organization with the local charity registration office (usually a division of the state attorney general's office) and with your Better Business Bureau.

* Ask if your contribution is tax-deductible. Contributions to tax-exempt organizations are not always tax deductible. Tax exempt simply means the organization doesn't have to pay taxes. Tax deductible means the donor can deduct contributions to the organization on his or her federal income tax return.

The Internal Revenue Code defines more than 20 categories of tax exempt organizations, but contributions to only a few of these are also tax deductible. Principal among tax deductible groups is the 501(c) (3) category, broadly termed "charitable" organizations. How to reach: Park Companies, (330) 645-7275 or www.parkmazdaakron.com; Better Business Bureau Wise Giving Alliance, www.give.org


Keep it simple

Altria Corp., parent company of Kraft Foods and Phillip Morris, donated more than $138 million in grants last year to causes such as hunger, domestic violence, the environment, AIDS and the arts.

With that kind of budget, Altria used to receive thousands of requests from organizations that didn't fit with the company's charitable criteria.

So, about two years ago, Altria posted its entire grant-awarding process on its corporate Web site. Now, organizations can see what areas Altria funds and what grants are available, and send the Request For Proposal online.

"Our strategy has shifted from being a grantor that accepts proposals randomly to being a grantor that does its funding through these RFPs," says John Barnes, Altria Corp.'s manager of contributions.

Here are a few of the benefits of converting all your charitable paperwork to online.

Compare

Instead of evaluating grants as they came in, Altria can compare in some cases more than 200 at once.

"If those 200 came in throughout the year, they wouldn't have been evaluated against each other to see which were the strongest programs," Barnes says.

Reach

When the grant process was hard copy, the only people who could apply were those who were mailed proposals.

"Now, anybody can go on the Web site," Barnes says. "Or anybody can go on a search engine to look for AIDS funding, find our Web site and apply."

Efficiency

The electronic RFPs save Altria valuable time internally because data can be downloaded directly to its RFP database, then e-mailed to its judges.

Tuesday, 26 August 2003 10:48

Choose wisely

Every day, John Ludwig, CEO of Park Companies, gets a phone call from a charity or nonprofit organization asking for a donation. Some he gives to. Others he doesn't.

Few companies have the budget to contribute to every needy group trying to raise funds, so it's important to set firm guidelines for your charity dollars.

"We try to stay close to our community," says Ludwig, whose company owns and operates Park Honda, Park Acura and Park Mazda in Green. "We don't do things that are fund-raisers by outside corporations because all the money does not go directly toward the cause. All the money has to go toward the cause."

In April, Park Companies donated $10,000, and became the first sponsor in a new corporate campaign for the Humane Society of Greater Akron. The goal of the campaign is to raise at least $100,000 of the Human Society's $800,000 annual budget.

In return, Park Companies was recognized for its sponsorship at three major humane society events in the Akron-Canton area; the final event is to take place this month.

"I'll share the spotlight with anyone," Ludwig says. "They need it. They want to raise $100,000 and they want to build a new facility. I'd like to see everyone get on board. They don't have to give what we did, but just give something."

Ludwig continues, "We like to put our promotional dollars to support the community and we budget so much a year for that. It's not whoever gets there first. We have the things we do every year and things we just won't do."

Regardless of how you choose to spend your philanthropic dollars, here are some charitable giving basics from the Better Business Bureau's Wise Giving Alliance.

* Do not give cash; always make contributions by check, and make your check payable to the charity, not to the individual collecting the donation.

* Keep records of your donations (receipts, canceled checks and bank statements) so you can document your charitable giving at tax time. Although the value of your time as a volunteer is not deductible, out-of-pocket expenses (including transportation costs) directly related to your volunteer service to a charity are deductible.

* Don't be fooled by names that look impressive or that closely resemble the name of a well-known organization.

* Check out the organization with the local charity registration office (usually a division of the state attorney general's office) and with your Better Business Bureau.

* Ask if your contribution is tax-deductible. Contributions to tax-exempt organizations are not always tax deductible. Tax exempt simply means the organization doesn't have to pay taxes. Tax deductible means the donor can deduct contributions to the organization on his or her federal income tax return.

The Internal Revenue Code defines more than 20 categories of tax exempt organizations, but contributions to only a few of these are also tax deductible. Principal among tax deductible groups is the 501(c) (3) category, broadly termed "charitable" organizations. How to reach: Park Companies, (330) 645-7275 or www.parkmazdaakron.com; Better Business Bureau Wise Giving Alliance, www.give.org


Keep it simple

Altria Corp., parent company of Kraft Foods and Phillip Morris, donated more than $138 million in grants last year to causes such as hunger, domestic violence, the environment, AIDS and the arts.

With that kind of budget, Altria used to receive thousands of requests from organizations that didn't fit with the company's charitable criteria.

So, about two years ago, Altria posted its entire grant-awarding process on its corporate Web site. Now, organizations can see what areas Altria funds and what grants are available, and send the Request For Proposal online.

"Our strategy has shifted from being a grantor that accepts proposals randomly to being a grantor that does its funding through these RFPs," says John Barnes, Altria Corp.'s manager of contributions.

Here are a few of the benefits of converting all your charitable paperwork to online.

Compare

Instead of evaluating grants as they came in, Altria can compare in some cases more than 200 at once.

"If those 200 came in throughout the year, they wouldn't have been evaluated against each other to see which were the strongest programs," Barnes says.

Reach

When the grant process was hard copy, the only people who could apply were those who were mailed proposals.

"Now, anybody can go on the Web site," Barnes says. "Or anybody can go on a search engine to look for AIDS funding, find our Web site and apply."

Efficiency

The electronic RFPs save Altria valuable time internally because data can be downloaded directly to its RFP database, then e-mailed to its judges.

Monday, 28 July 2003 06:38

Battle ready

Bill Kimmerle, president and owner of hardwood product manufacturer Baker McMillen Co. in Stow, sees products imported to the United States from China as nothing short of Weapons of Mass Destruction.

"We are in an economic war with China," Kimmerle says. "The casualties on the field of battle are all the buildings and all the industrial and commercial sites that are available all over the place. There's an absolute glut of places where you could have manufacturing because all these people are going out of business."

Kimmerle and manufacturers like him have reason to be concerned. The state of Ohio lost 97,100 manufacturing jobs, or 8.9 percent, between July 2000 and December 2002, according to the U.S. Bureau of Labor Statistics. That's the fourth highest number of jobs lost in the country, behind California, Texas and New York.

Kimmerle says most of those jobs were lost to foreign competitors like Mexico and China -- countries which can undercut U.S. manufacturers on price due a cheap labor pool and little to no governmental regulation. The United States' trade deficit with China rose to $103 billion last year, the largest with any country, according to the National Association of Manufacturers.

Even Kimmerle was forced to have some of Baker McMillen's products made overseas.

"I hate it," he says. "I hate moving products off-shore to be competitive because we become part of the problem, and I don't want to be part of the problem, but it's a matter of survival right now. Hopefully, we can also be part of the solution."

It's not just Kimmerle who is feeling the pressure. About half (118) of the employers who responded to the Smart Business Network/Employers Resource Council Workplace Survey are manufacturers. For the first time in the survey's four-year history, products from China -- and Asia in general -- were singled out as a top challenge facing many employers.

It ranked as the fifth overall concern across all industries.

Speak out

That's why Kimmerle and Thomas Murdough Jr., president of Step2 Co., a manufacturer of children's toys in Streetsboro, are campaigning with state Sen. Kevin Coughlin (R-Cuyahoga Falls) and organizations including the National Association of Manufacturers and the U.S. Chamber of Commerce to help make lawmakers more aware of this crisis.

"These groups have the ear of Congress," Kimmerle says. "We need to get involved with these groups and to speak up, force the issue, and push hard. We can't be heard individually, but as a collective group, we have a voice."

Innovate

The best defensive move U.S. manufacturers can make against foreign competition is to continually innovate and patent new products. Kimmerle says Baker McMillen just closed the patent process on two new brush roller designs for vacuum cleaners.

"You have to continually develop new stuff," Kimmerle says. "That's your only weapon -- proprietary processes, patented items and new products. Meanwhile, you have to fight the political battle because it's tough as nails out there." How to reach: Baker McMillen, (330) 923-8300 or www.baker-mcmillen.com

Monday, 28 July 2003 06:34

Health scare

Newspapers across the country in June picked up on a study released by the Center for Studying Health System Change which reported that health care spending had actually slowed from the previous year -- just barely.

The average American spent 9.6 percent more on health care in 2002 over the previous year. Last year's study reported Americans spent 10 percent more on health care in 2001 over the previous year. A fourth-tenths of a percentage point decrease in spending was deemed worthy of the front page.

The news was of little comfort to Jack Schron, president of Jergens Inc. in Cleveland. His machine tooling shop was forced to change its health care provider for the third time in five years due to a dramatic increase in premium costs. He won't reveal the exact increase, saying only that it was "double-digit plus."

"It's a complete wild card," Schron says. "Do you budget for 2 percent or do you budget for 25 percent? ... It's enough to choke a horse."

Schron's woes mirror those of the employers who responded to the Smart Business Network/Employers Resource Council Workplace Practices Survey. The cost of health care was the third biggest challenge facing employers, according to the survey; last year, it was ninth.

"We wrestled with a whole series of options," Schron says. "The two biggest were, do you change plan design and stay with your current carrier so you don't have the disruption, or do you go out there shopping and seek other quotes?"

Over several days, Schron met with his employees in groups of 20 to talk about the health care issues facing his workers. Based on those meetings, and after receiving quotes from several carriers, Schron decided to switch providers, a change which required employees to switch to a new network of hospitals and doctors.

Other changes Schron has made over the years to help curb costs include:

* Mail order

According to the Center for Health Service Change study, spending on prescription drugs rose 13.2 percent last year, contributing 22 percent to the overall spending increase. One way Jergens is trying to curb costs is by offering a mail-order prescription plan.

"You can get three months of prescription for the price of two from a regular pharmacy," Schron says.

* Options

With its new carrier, Jergens offers a two-tiered plan to employees. The top tier includes higher benefits with higher employee contributions for those who need more health care services. For employees who don't require as many services, the second tier includes a high deductible and co-payment but a lower employee contribution.

"The employees then make a value judgment as to which way it makes the most sense for them to go," Schron says. How to reach: Jergens Inc., (216) 486-5540 or www.jergensinc.com

Monday, 30 June 2003 07:24

Built to last

National retailers didn't look kindly on Northeast Ohio in the late 1970s and early 1980s. The region's rust belt reputation made it difficult to attract retailers, despite millions of potential customers with a limited shopping selection.

Mitchell Schneider, president of First Interstate Properties Ltd., helped change the face of Northeast Ohio retail. He was the first developer to bring chains like Wal-Mart, Kohl's, BJ's Wholesale Club, Costco, Crate 'n Barrel, The Cheesecake Factory and Expo Design Center to the region region and is currently developing Legacy Village on former TRW land in Lyndhurst.

"Starting a retail development company from scratch was a significant challenge in an industry that was filled with established real estate developers," Schneider says. "We were able to get our company started through referrals and references from other developers, a quality group of investors backing the venture and a lot of tenacity."

Since forming the company in 1989, First Interstate has developed eight properties making up 3.6 million square feet, and is on pace to grow its portfolio to 6 million square feet in three to five years, according to the developer.

Land for commercial development is limited in Northeast Ohio, and communities often want to hold on to what undeveloped land is left, which creates controversy for new projects. Schneider, a former real estate attorney, knows how protective communities can be and says he actively addresses their concerns and the community impact of the development before they become a point of contention.

First Interstate's-$65 million, 800,000-square-foot Avon Commons project, which opened last year with anchor tenants including Kohl's, Target and Old Navy, almost didn't happen. The project was met with lawsuits and a contested commercial rezoning vote, which led to the Ohio Supreme Court certifying the votes.

Throughout the ordeal, Schneider says he collaborated with community leaders for solutions, including adding more green space than what was mandated and paying $1.8 million for public roads leading to the shopping center.

"We've been proactive rather than having the community having to identify the problems and having to extract from us the solutions," Schneider says. "That's not typical in the development industry." How to reach: First Interstate Properties Ltd., (216) 765-1065 or www.first-interstate.com

Thursday, 19 June 2003 13:37

Sweat success

There could be one in your rec room or basement. Orr you may have seen Chuck Norris or Christie Brinkley working out on one while you were flipping through the cable channels.

It's called the Total Gym, and it's one of nearly 1,000 pieces of exercise equipment and other fitness products sold by Canton-based Fitness Quest.

More people have hear of Fitness Quest's products than have heard of the company. The Total Gym is well-known, as are the Torso Track, the Slam Man and the Gazelle, which is hawked by fitness guru Tony Little, who has a wide line of exercise and nutritional products with Fitness Quest.

But the fact that Fitness Quest's brands are better known than the company name doesn't bother CEO and President Robert Schnabel.

"We're a very quiet company in Summit County," says Schnabel. "People don't expect to hear we're on course to do $200 million this year. We do it very quietly and very underneath the radar screen."

Schnabel was hired to run Fitness Quest in 1994 after then-Time Warner bought the parent company in bankruptcy court. Schnabel took over Fitness Quest with only four products and zero sales.

Last year, the company posted $142 million in sales in 77 countries. It launched with 65 employees and today has 114.

"Those initial 65 are the nucleus of our success," Schnabel says. "I would put our team up from a marketing, media, product-development, distribution standpoint against anybody, and that's why we win and that's why we're successful."

Fitness Quest's marketing niche is its short-form cable television commercials, infomercials and Internet advertising. The ads reaches more than 70 million households each year, according to Fitness Quest, which account for more than half of the company's sales.

Schnabel, who bought Fitness Quest from Time Warner in 1997, says his growth focus will be to introduce more high-end equipment to his product line. Today, the most expensive stationary bicycle Fitness Quest sells is $399. Schnabel would like to see the top-line equipment sell at closer to $1,000.

"If we do what we're supposed to do in our marketing and distribution, then the performance always follows," Schnabel says. "I don't concentrate on the financial performance -- I focus on marketing and distribution, and go from there." How to reach: Fitness Quest, (330) 478-0755 or www.fitnessquest.com

Friday, 30 May 2003 06:37

Flight plan

It's April 11, and just three weeks ago, John Mok, Cleveland's Director of Port Control, learned that Continental Airlines, Cleveland's largest carrier, will cut its work force by 1,200, yet another blow to the shaky relationship between Cleveland Hopkins International Airport and the airline.

Elsewhere, three of the 12 largest airlines are in bankruptcy court, while the others, save anomaly Southwest, announce huge losses, with The Wall Street Journal reporting that revenue was down 17 percent in 2002 for nine major airlines.

Combine these challenges with disgruntled travelers who are not only worried about safety since Sept. 11, but about a mysterious illness called SARS, which in early April was halting travel to places like Hong Kong, China and even Toronto.

How do you run an airport in the times like these? Moreover, how do you plan a $1.4 billion expansion when more than half of your revenue is based on the health of the airlines?

"We know all the airlines are bleeding red -- it's just a matter of time before the rest of them go into bankruptcy," Mok says. "...We've got to do whatever we can to assist them through these difficult times. At the same time, we've got to make sure that the long-term future of the airport is not totally dismissed."

Mok was appointed director of port control in July 2002 and is responsible for the management and operation of Hopkins and Burke Lakefront airports.

He previously served as vice president of planning for the Dallas/Fort Worth International Airport, head of strategic planning for the Hong Kong Airport Authority, project manager for the Newark International Airport Redevelopment Program and manager of the Major Works Program at John F. Kennedy International Airport.

Smart Business sat down with Mok to talk about how he will manage his $98 million annual budget, 400 port control employees, 5,600 airport employees and the travelers who pass through Hopkins, 10.8 million of them last year.

What's a typical day like for you?

There is no typical day, but over the course of a week, there are routine activities, like I have a series of meetings down in City Hall I've got to attend to. I have mayor's cabinet meetings, mayor's board of control meetings, and every week there is a city council meeting. In preparation of city council, if we've got any issues, I've got to go through the whole legislative process with the [council] aviation committee, finance committee.

A good portion of my time is spent downtown just handling city procedure. Out here at the airport, my organization is divided into a series of what I call cluster groups. I'll have my weekly staff meeting with my cluster chiefs, which is basically we run through a list of what's hot, what's cold, what's dead and so on. That's pretty much to carry us through week to week in terms of the management of the business.

The general public assumes that because we're a city-owned airport and a city department that we must be run off the back of the city taxpayer. That's a common assumption, but it's a wrong one. We, and the city's utilities department, water and power, are enterprise funds. We are not funded by any tax dollars.

At the end of the day, we add up all our expenses, and above all the expenses is debt service, capital financing. We deduct from that expense all of our non-airline derived revenue, that's what we get from terminal concessions, the retail stores, the food and beverage shops in the terminal, our parking concessions, the hotel, the rental cars, all our non-airline operations.

We deduct the revenue from those from our expenses -- of course it doesn't cover our total expenses. The difference or residual amount is the basis for determining what landing fees are, and terminal rentals, all the costs that the airlines then have to ante up.

The airlines guarantee that we remain solvent from year to year. We operate as a break-even business, kind of like a not-for-profit organization. It's also a misnomer that the city is raking in all sorts of revenue from the revenue. We cannot remit any revenues downtown. That's against our federal regulations.

Because the airlines pick up the difference between what it costs to operate the airport and what we earn from non-airline sources, they're going to be very parsimonious about what they want us to be spending our money on. So, we review with them annually our budget. They don't approve our annual budget, but they have significant influence over what they think is acceptable in our budget.

But, it's a trade-off, obviously. They are carrying the can to keep us solvent from year to year, to keep us at break-even point. What they get in exchange for that financial obligation is they get financial control of our capital development program.

We can't build anything on this airport without airline approval, because this goes back to our annual budget; the biggest component is our debt service. So, if the airlines control how much capital we expend, they control how high the debt service is. Pretty simple, isn't it? (Laughs).

How can you have long-range plans when there is so much uncertainty facing the airline industry?

The airlines' interest is obviously in trying to contain costs. They don't want to pay for anything. As far as an airline is concerned, the best airport to fly into is one that pays them to land there. Airlines, as we know them, have a very short-term horizon.

Before the current crisis, a long-term plan for an airline was maybe, a week. Today, it's hour to hour.

Airports are a very different animal. Airports have to address future requirements. There are always going to be perturbations in an economic cycle -- things are going to up, things are going to go down -- but if you go back the past 40 years of the industry, it's always been progressive growth, so we always look long-term. We're looking 10 to 20 years out.

The reality is for an airport, we basically provide capacity for the airlines to serve our community. We fully appreciate that post-9/11, recession, the war and now SARS are having an impact for some West Coast airports, in particular. Traffic is way down.

We know all the airlines are bleeding red -- it's just a matter of time before the rest of them go into bankruptcy. Hopefully they won't, but that's the speculation.

We recognize that they are in a survival mode right now. We've got to do whatever we can to assist them through these difficult times. At the same time, we've got to make sure that the long-term future of the airport is not totally dismissed.

We're in an interesting situation because our expansion program, which is basically providing a lot of improvements to the runways and so forth, was approved by the airlines three years ago, but times were fat. We floated our Series 2000 bonds, which is funding for all this stuff. Obviously, we couldn't have done this without airline approval.

And that actually was done at the impetus of Continental Airlines because three years ago, this airport was technically at airspace capacity during the peak hours. Continental had these very ambitious plans to keep growing, and they came to us and said, 'Hey guys, you're holding us back, we need X,Y and Z' -- which is why we're doing what we're doing.

Now, they're the first people in line saying, 'Can we stop everything? Can we turn the clock back three years?'

Unfortunately, when you have a growth situation, you provide for future needs, and people are making money, so you go into that development mode. Then, you're met with this immediate economic downturn. We have the unfortunate situation where the debt service for these new facilities from monies we borrowed three years ago, that debt service is hitting now. We can't charge the carriers the interest for those funds until they can actually utilize the facilities.

All that notwithstanding, Hopkins, in terms of being a business partner with the airlines, has not been there. Our concession programs are underperforming. Yes, the drop-off of passengers has reduced revenue, but that notwithstanding, the average spending per passenger should be much higher than it is.

We have been working aggressively with our concessionaire to improve product offering. I'll be the first to say finding a good meal at Hopkins may be a stretch. People have complained to me, 'We can't get a good sit-down meal at Hopkins.' You can get a great grab-and-go meal at Hopkins, but if you've got an hour-and-a-half -- outside of Max & Erma's -- where are you going to go here?

What has been absent from the Hopkins vocabulary is the recognition that we are in the customer service delivery business.

How do you find that balance between the traveler wanting convenience and service, but still ensuring their safety?

This is a very safe facility in terms of aircraft safety, and it's a very secure facility. And working with the TSA (Transportation Security Administration), we are as, if not more secure, than most airports in the country when it comes to passenger screening and baggage screening.

That's never been compromised by Hopkins.

In terms of customer service delivery, it may have been overlooked. What we've done here is reorganized our operations department -- we've created a customer service division. That customer service division is going to be responsible for all front-of-the-shop activities. It's all the activities that the traveling public encounters in coming through the airport.

We are about to roll out an Airport Ambassador program. Ambassadors are community volunteers that come to the airport, they walk the floors, they're not behind a static location. Their job is to offer a helping hand to passengers who are lost or are just in need of direction or support.

They are essentially community meeters-and-greeters. They are here to meet the traveling public and to assist them in any way they need.

We're going to set up a terminal management group. Their responsibility is kind of like terminal ombudsmen. They're going to be walking the floor and making sure that our tenants have their shops tidy and orderly, and it conforms to lease requirements.

We're also setting up a ground transportation office to address the issues of public conveyance to and from the airport.

This is not costing us a dime. It's a reorganization, a redeployment and an articulation of a different set of priorities.

Do you see regional airports as competition for Hopkins? Are you doing anything to take market share away from them?

First of all, I don't look at it very parochially as how do we keep people at Hopkins. People recognize Hopkins is not just a city of Cleveland airport; it's a Northeast Ohio regional airport.

From a regional context, what we have been discussing with community leaders, and we'll embark on shortly, is that regional air service needs assessment. That study is going to look at, what are the needs of the entire Northeast Ohio region, and in that region, it's not just Hopkins, there's Akron-Canton, there's Youngstown, there's County, there are many airports.

So, you don't mind sharing business with the other airports?

If there were no other airports, I would love everybody to fly out of here. But the question that puzzles me more than whether or not somebody is flying out of that airport rather than our airport, is the demographic and economic data, the population and the per capita income of this region, would suggest that there should be a heck of a lot more people flying out of this region than are flying.

Does that mean we're losing traffic to Pittsburgh or Cincinnati or Detroit? We shouldn't be, because the dominance of the hub carrier at those airports is much greater than the dominance of Continental here at Hopkins. What does that mean? It means our airfares are much more competitive here than they are at those other three airports.

Where do you want to see Hopkins in five years or 10 years?

In business (laughs). Hopkins has a tremendous potential to not only continue as it is today to be a major domestic hub for Continental, but in five years, I would like to see our runway programs completed, and that will allow us to start marketing the region to the Pacific Rim.

Right now, with our 9,000 foot runway, we don't have the length to get a fully-loaded big bird over the Pacific. How to reach: The City of Cleveland, Department of Port Control, (216) 265-6022